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Old 07-15-2019, 07:01 PM   #1
WTucker
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Default Non-Compete Agreement

I have been talking with a company for a little while now about coming to work for them. Recently, I accepted an offer from them. Today, they asked me to sign a non-compete as part of the pre-employment paperwork. The thing that has me hung up is that it states that if I leave for any reason, I cannot work for a competitor in this area for 2 years.

I have no problem with agreeing to not poach clients, etc., but saying that I can’t even get a job in my area is excessive in my mind. What does the green screen think?
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Old 07-15-2019, 07:05 PM   #2
Uncle Saggy
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Same thing for my job

1 year not going after customers or hiring techs

Sign that, no probs
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Old 07-15-2019, 07:05 PM   #3
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I had to sign one similar to that with my current employer. My research told me that they really don’t hold much water and are hard for the ex employer to do anything about. If the “area” isn’t a specific distance then it for sure won’t hold up.
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Old 07-15-2019, 07:08 PM   #4
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Depends on how badly you want the job. I would have to be in your shoes and know the situation to have a firm opinion, but just from what you said I think they are asking a bit much. I come from dirt construction where guys changed jobs more than they changed drawers, so I’ve never been faced with that from either side of the fence.
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Old 07-15-2019, 07:08 PM   #5
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I’m my experience, it’s very rare and difficult to go after someone for this. Although, I do know someone who was recently hit with a 80k lawsuit due to switching to a competitor... We’ll see what comes out of it though.

I’m also interested to see what some more knowledgeable folks have to say about this as I’m in contract as well.
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Old 07-15-2019, 07:12 PM   #6
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Texas is a right to work state, so they'll have a hard time holding you to the agreement.
That being said if it's written correctly by a lawyer and they compensate you financially for signing it they can be tough to get out of.
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Old 07-15-2019, 07:21 PM   #7
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7 nurses and nurse practitioners here in East Texas are going thru this right now and a judge whom the doctor was a big donor to in the last election upheld the non-compete clause.
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Old 07-15-2019, 07:28 PM   #8
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Originally Posted by Drycreek3189 View Post
Depends on how badly you want the job. I would have to be in your shoes and know the situation to have a firm opinion, but just from what you said I think they are asking a bit much. I come from dirt construction where guys changed jobs more than they changed drawers, so Iíve never been faced with that from either side of the fence.
I want it but I donít need it. It will be a little more money, but the retirement benefits are substantially better. Like you I worked construction for years as an electrician. Now I work for a pipeline company as an I&E Tech. This is a new thing for me. Agreeing to basically give up my trade for two years if I leave is dumb. This job is more on the engineering level, so technically I could go back to doing electrical work if I quit but why go backwards.
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Old 07-15-2019, 07:30 PM   #9
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Originally Posted by Uncle Saggy View Post
Same thing for my job

1 year not going after customers or hiring techs

Sign that, no probs
Saggy, did yours say that you canít even work for competition? I can agree to not take customers.
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Old 07-15-2019, 07:36 PM   #10
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I wouldn’t sign it. If they want you bad enough they will have you sign a non-disclosure instead. I just passed up hiring a really good guy due to one. His had an injunction clause in it that basically allows them to block him from working.

I left a **** good job last year because the company was bought out and they wanted me to sign One.
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Old 07-15-2019, 07:39 PM   #11
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2 years & for any reason would be hard for me to swallow...I've signed them before but never for more than one year, nor did I have to deal with any conflicts regarding the agreement so have no actual experience.
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Old 07-15-2019, 07:40 PM   #12
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Pretty standard in a lot of industries I wouldn’t worry about it
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Old 07-15-2019, 07:40 PM   #13
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Originally Posted by Stonecold69 View Post
7 nurses and nurse practitioners here in East Texas are going thru this right now and a judge whom the doctor was a big donor to in the last election upheld the non-compete clause.
That sounds totally illegal. There should be a big lawsuit over that with a possible removal from the bench.
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Old 07-15-2019, 07:44 PM   #14
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Too long of an agreement come back at 6 months and call it good. It’s just the way the world spins today
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Old 07-15-2019, 07:48 PM   #15
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Is the size of the ďareaĒ specified?
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Old 07-15-2019, 07:48 PM   #16
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Originally Posted by TX CHICKEN View Post
I had to sign one similar to that with my current employer. My research told me that they really donít hold much water and are hard for the ex employer to do anything about. If the ďareaĒ isnít a specific distance then it for sure wonít hold up.
Welllllll - matters who you working for. Have definitely heard of Halliburton goin after BD guys after they left.
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Old 07-15-2019, 07:51 PM   #17
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Is the size of the ďareaĒ specified?






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Old 07-15-2019, 07:52 PM   #18
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I would never agree to sign anything like that just my opinion. Would not want to get fired knowing I signed that and give them the right to treat you like a dog knowing you signed it. If your good enough for them to make you sign it just work for yourself.
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Old 07-15-2019, 07:57 PM   #19
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I’ve been around them for years. Would never sign one unless I was compensated during the non-compete period. It is a job seekers market. Unemployment is a choice these days. Employers are desperately seeking good qualified employees.

As a minimum, I would request your base salary during the non-compete period.
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Old 07-15-2019, 08:00 PM   #20
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I signed one that was 6 months and had something like a 200 mile enforcement. Two years is a long time, especially in any type of specialty field or niche. Long enough that some employers may not want to hire someone who had been out of the game that long.
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Old 07-15-2019, 08:01 PM   #21
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Default Non-Compete Agreement

Maybe you should see if they will amend to if you leave on your own accord and not terminated for anything besides gross negligence then it holds. Seems unfair they can fire you and then you are stuck to two years in a NCA. Also, seems odd that that was not upfront prior to you accepting offer and waiting to spring it once you accepted. Maybe see if they will better define competitors as that could be really broad in some industries.


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Old 07-15-2019, 08:02 PM   #22
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OP,

Best thing you can do is speak with an Attorney that works in employment law for Texas.

First company i went work for in Texas had a standard non-compete contract. Per my Attorney it lacked a lot of things Texas law required to be up-held in court.

Now, that said, I've had non-compete contracts given to me that he said would hold up. I made sure that had they let me go for any reason the non-compete was null and void.

Again, I'd advise you to get with an attorney, so you don't find yourself on the short end of a stick.
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Old 07-15-2019, 08:14 PM   #23
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Quote:
Originally Posted by hopedale View Post
OP,

Best thing you can do is speak with an Attorney that works in employment law for Texas.

First company i went work for in Texas had a standard non-compete contract. Per my Attorney it lacked a lot of things Texas law required to be up-held in court.

Now, that said, I've had non-compete contracts given to me that he said would hold up. I made sure that had they let me go for any reason the non-compete was null and void.

Again, I'd advise you to get with an attorney, so you don't find yourself on the short end of a stick.


This is really the best advice. Texas law is rather specific on what must be included in covenant language to be enforceable. I work with non-competes regularly and ours are usually enforced and are always upheld but our General Counsel is a bona fide expert on non-competes.

Just reading the text of that passage alone would have me believing itís not enforceable since it basically says you cannot work in the county, state, and country. A reasonable judge would probably agree that the restriction isnít reasonable and the company couldnít enforce it.




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Old 07-15-2019, 08:15 PM   #24
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I have been through this having worked for a company that chose to enforce their non-compete agreements against others at times, and eventually me, when I left after 14 years.

I should preface this next part - I am not an attorney and the the following is not legal advice, simply a recollection of my personal experience.

First misconception is that Texas is a “right to work” state. Although this is a true statement, the short version of the interpretation is that you have the right in the State if Texas to work without being forced to join a union, or something along those lines, and does not allow you any freedoms to work and be released from an agreement.

An employee agreement is absolutely enforceable in Texas, and typically has to meet certain criteria. It must have a time limit, a reasonable jurisdiction (geographical distance), and restrictions regarding future employment. These are typically the items that can be challenged and potentially modified which is more likely than the whole agreement being tossed.

Even if they do lose some or all of the conditions, it can quickly become an expensive process.

If you want the position, try and negotiate the length (6 months to a year maybe) or define the distance to which it can be enforced.

If you are concerned, have an attorney who specializes in these agreements take a look and share their opinion.

End the end the opportunity may be worth it.

I would also make sure that the agreement is not enforceable if you are terminated for reasons other than violation of company policy (just cause).

In my case, I chose to test the waters and see if they really wanted to fight it, once they made it clear they would. I took an opportunity with a company that allowed me to work within the restrictions of the agreement.

Just read and understand what you are signing either way.

Good luck!
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Old 07-15-2019, 08:17 PM   #25
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NCs can be binding and don’t forget most companies of any size have legal in house or on retainer and can make you need to get a layer to get out from under the legal paperwork they can tie you up with, got a friend going thru this now. Not fun.
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Old 07-15-2019, 08:22 PM   #26
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These are becoming standard procedure for most medium to large companies. There is probably a clause that says that if any part is unenforceable the remainder of the contract is enforceable. A judge may strike the area you can’t work but agree to the term or vice versa. Long and short is neither will you or a future employer want to test the legal merits unless you have an extremely special set of skills and high salary. You may be be able to negotiate an upfront separation agreement if you are very specialized that will compensate for the time period you will not be employed in your field. If not I would recommend that you make sure the new company is where you want to be long term.
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Old 07-15-2019, 08:26 PM   #27
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Originally Posted by CEO View Post
I signed one that was 6 months and had something like a 200 mile enforcement. Two years is a long time, especially in any type of specialty field or niche. Long enough that some employers may not want to hire someone who had been out of the game that long.
Yes it is, and that is exactly what this is. A specialty/niche field.

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OP,

Best thing you can do is speak with an Attorney that works in employment law for Texas
I have considered this. Thanks.
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Old 07-15-2019, 08:31 PM   #28
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Quote:
Originally Posted by hopedale View Post
OP,

Best thing you can do is speak with an Attorney that works in employment law for Texas.

First company i went work for in Texas had a standard non-compete contract. Per my Attorney it lacked a lot of things Texas law required to be up-held in court.

Now, that said, I've had non-compete contracts given to me that he said would hold up. I made sure that had they let me go for any reason the non-compete was null and void.

Again, I'd advise you to get with an attorney, so you don't find yourself on the short end of a stick.
This is good advice. I have seen some not hold water and others that are iron clad documents. I have seen guys leave or get terminated and nothing happen and I have seen companies go after individuals after they've been terminated or just left for other opportunities. I have seen a company buyout and 10 days into the merger a person leave for another opportunity in a different field, but since the purchasing company was in that field (pumps), they went after him.

I think you would have to have very strong credentials for a company to pay you after leaving or termination.

Most non competes are pushing the 2 year mark now days, I can't recall the last 6 month term I have heard of, it's been a long time. Most are 2 years for 100 miles and then 1 year for 50 miles. That is measured from the home office you report to or a designated region described on a map.

I know that in La, if that is your territory, once you cross the state line, they can't enforce it any longer, and it must be listed by parish over there, not a distance measurement.

I will add this, if you have an attorney look at it, make sure they are in the employment field. No offense to any JD here but I know several that I call friends and they claim they can't hold water when in fact they have been well written and hold up. There are a few in Beaumont that I could recommend, just PM me.
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Old 07-15-2019, 08:39 PM   #29
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Been through this. Very difficult to enforce in Texas. I laughed when my current employer asked me to sign one. If you have a book of business hold out.
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Old 07-15-2019, 08:47 PM   #30
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For those of you saying that they are hard to enforce or not enforceable in a "right-to-work" state....that's just not true. They're held up time and again. There are certain ways that they must be written, there needs to be "consideration" (i.e. $$$) given in exchange, time and distance must be reasonable, but they're held up all the time.

I have a few key people with very reasonable, yet very enforceable non-competes and I have several others with non-solicitation clauses. I don't want to keep anyone from working. I do want to keep them from poaching my employees and my clients. I have enforced both.
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Old 07-15-2019, 08:58 PM   #31
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Originally Posted by curtintex View Post
For those of you saying that they are hard to enforce or not enforceable in a "right-to-work" state....that's just not true. They're held up time and again. There are certain ways that they must be written, there needs to be "consideration" (i.e. $$$) given in exchange, time and distance must be reasonable, but they're held up all the time.

I have a few key people with very reasonable, yet very enforceable non-competes and I have several others with non-solicitation clauses. I don't want to keep anyone from working. I do want to keep them from poaching my employees and my clients. I have enforced both.
They havenít offered me any money to sign it, and the distance is not specified. I could totally understand not poaching employees and clients. The not working is a problem for me. I plan to be at this company long term, but I planned that with my current company. Here I am 10 years later with a potential good opportunity though. You just never know what will come up.
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Old 07-15-2019, 09:02 PM   #32
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Originally Posted by WTucker View Post
They havenít offered me any money to sign it, and the distance is not specified. I could totally understand not poaching employees and clients. The not working is a problem for me. I plan to be at this company long term, but I planned that with my current company. Here I am 10 years later with a potential good opportunity though. You just never know what will come up.
Tell them to better define it. I would never sign one without strict parameters that I agreed with.
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Old 07-15-2019, 09:05 PM   #33
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I agree with Curtintex. More times than not your former employer will want to litigate the issue at a cost higher than you or your new employer is willing to pay. Are you willing to spend 10’s of thousands of dollars to challenge the enforceability of an agreement? These cases make divorce seem like a bargain for an employee. Many employers are terminating employees that do not sign agreements post hire due to todays’s employment environment. Make sure you are sold on the new company before moving to the “greener grass”.
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Old 07-15-2019, 09:08 PM   #34
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I agree with Curtintex. More times than not your former employer will want to litigate the issue at a cost higher than you or your new employer is willing to pay. Are you willing to spend 10ís of thousands of dollars to challenge the enforceability of an agreement? These cases make divorce seem like a bargain for an employee. Many employers are terminating employees that do not sign agreements post hire due to todaysís employment environment. Make sure you are sold on the new company before moving to the ďgreener grassĒ.
Yeah. Thatís a big no for me. The last thing I want to do is go broke in court for trying to make a better move for myself/my family.
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Old 07-15-2019, 09:15 PM   #35
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I had to sign one about 10 years ago as "a condition of employment" for a job I was already at for a few years. I found an attorney and offered him a spot on a guided fishing trip in exchange for advice because I couldn't afford him. He was super cool about the whole thing and gave me solid advice and I was able to negotiate down the duration and the geographic area based on his advice. Might be worth a shot if you know of an attorney who may do something similar for you. As mentioned above, it may or may no be enforceable and even if it isn't, it could cost you a lot of money to prove that in court.
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Old 07-15-2019, 09:25 PM   #36
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I got sued over one. Judge threw it out because it was too broad and therefore unenforcable but it cost me a butt-ton of money to fight it.
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Old 07-15-2019, 09:35 PM   #37
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I sold a company a few years ago and signed a non compete for 2 years barring me from anything in that particular industry. Later I had the opportunity to invest in a similar company but was told by my attorney I would be sued and I would lose...with damages. The key was I received substantial compensation for the non compete.

Generally depends on how well written and if you are compensated .Get a lawyer
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Old 07-15-2019, 09:43 PM   #38
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Originally Posted by curtintex View Post
For those of you saying that they are hard to enforce or not enforceable in a "right-to-work" state....that's just not true. They're held up time and again. There are certain ways that they must be written, there needs to be "consideration" (i.e. $$$) given in exchange, time and distance must be reasonable, but they're held up all the time.

I have a few key people with very reasonable, yet very enforceable non-competes and I have several others with non-solicitation clauses. I don't want to keep anyone from working. I do want to keep them from poaching my employees and my clients. I have enforced both.


Curt is correct, they are enforceable if certain criteria are met. They do need to have a reasonable time and geographic restriction. For what itís worth, Iím a lawyer and draft and review non-competes.


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Old 07-15-2019, 10:27 PM   #39
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I would never sign one again unless it was very worth while. I've seen them have other companies not hire a person who has signed one before just to keep away from the headache.
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Old 07-15-2019, 10:36 PM   #40
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Quote:
Originally Posted by curtintex View Post
For those of you saying that they are hard to enforce or not enforceable in a "right-to-work" state....that's just not true. They're held up time and again. There are certain ways that they must be written, there needs to be "consideration" (i.e. $$$) given in exchange, time and distance must be reasonable, but they're held up all the time.

I have a few key people with very reasonable, yet very enforceable non-competes and I have several others with non-solicitation clauses. I don't want to keep anyone from working. I do want to keep them from poaching my employees and my clients. I have enforced both.
kudos, sir. I applaud you for obviously paying attention in your lawyer meetings.

The poor advice on here regarding the alleged unenforceability of NCís is cringe-worthy. And to the extent a NC is allegedly illegal or unenforceable, courts can reform an allegedly unenforceable NC to comply with the law.
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Old 07-15-2019, 10:40 PM   #41
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kudos, sir. I applaud you for obviously paying attention in your lawyer meetings.



The poor advice on here regarding the alleged unenforceability of NCís is cringe-worthy. And to the extent a NC is allegedly illegal or unenforceable, courts can reform an allegedly unenforceable NC to comply with the law.


Well hell...if Iím gonna pay Ďem, I might as well listen to Ďem.
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Old 07-15-2019, 10:50 PM   #42
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Ain’t no way in hell I would sign it.
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Old 07-15-2019, 10:53 PM   #43
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Curt is correct, they are enforceable if certain criteria are met. They do need to have a reasonable time and geographic restriction. For what itís worth, Iím a lawyer and draft and review non-competes.


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Does compensation have to be given during the non compete term?
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Old 07-15-2019, 11:05 PM   #44
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It comes down to how willing you are to try and get out of the NC. We as a company steer clear of hiring folks with a NC in place because it isn’t usually worth the hassle. Yes, you may be able to go to court and win but will your mew job with them make you enough money to pay the atty fees.
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Old 07-16-2019, 02:50 AM   #45
Uncle Saggy
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Quote:
Originally Posted by WTucker View Post
Saggy, did yours say that you canít even work for competition? I can agree to not take customers.


No it didnít. Only said the not going after accounts and techs for a year..... mine was pretty basic
I donít know if Iíd go for the not working in the trade part.
But as stated, it is a right to work state
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Old 07-16-2019, 06:27 AM   #46
SL1
Six Point
 
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Any contract involves both signing parties. You should be negotiating for a severance of some kind if you are truly being restricted in what you can do if you or your employer decides to go a different direction.
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Old 07-16-2019, 06:48 AM   #47
Arrowslinger1
Ten Point
 
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I know a guy personally that got sued and lost. He was fined over $200k. If it doesn’t specify region and if they don’t pay you a good amount of money then it will probably be just a problem you can pay a lawyer to deal with when or if you leave.
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Old 07-16-2019, 06:57 AM   #48
KRB
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I had one and got sued.

I had a good attorney that said we had a strong case and would probably win, but it would cost me 20K to find out.

I settled with ex employer for 7500.00 and walked away , lesson learned. I wont sign another one.
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Old 07-16-2019, 06:59 AM   #49
KRB
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if they require you not to work in your field for two years then you need 2 years of severance added to the contract.
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Old 07-16-2019, 06:59 AM   #50
JSki
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Quote:
Originally Posted by jkk831 View Post
Does compensation have to be given during the non compete term?
Compensation is not a requirement, "consideration" is. Basically each party must provide or do something. The employer's consideration is typically satisfied simply by providing the confidential information.
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